Small Businesses Up the Ante this Holiday Season: Offer Discounts and Invest in Advertising to Get More Out of Small Business Saturday, According to NFIB/American Express Research
Number of business owners who say they’ll rely primarily on paid advertising to promote Small Business Saturday doubles; 67% will offer discounts to drive consumers to ‘Shop Small’ on November 30

Washington, D.C. – November 6, 2013 – With five fewer shopping days between Thanksgiving and Christmas, many small business owners say they’ll be pulling out all of the stops to get customers into stores during the critical holiday shopping season. According to the second annual Small Business Saturday Insights Survey, released today by the National Federation of Independent Businesses (NFIB) and American Express, more independent merchants will feel the Christmas creep as they start their promotional activity earlier than last year.

For many of the small business owners who are aware of Small Business Saturday, the day will be a part of their promotional calendar. Of those small business owners incorporating Small Business Saturday into their holiday plans, 70% say Small Business Saturday will be helpful in attracting new customers.

Small Business Saturday has become an important fixture on the business calendar for merchants and an increasing number are investing more money and providing additional incentives to reach customers. Even as social media and word of mouth remain the top methods for business owners to reach customers with their Small Business Saturday offerings, the number of business owners who say they’ll rely primarily on paid advertising (TV, radio and newspaper) to promote Small Business Saturday has doubled (18% vs. 9% in 2012). Discounts continue to be the top incentive used to encourage consumers to Shop Small, but more business owners are planning to reward customers by offering them a free gift with purchase (33%, up from 20% in 2012).

The busy holiday season often demands a more robust workforce; a large number of business owners are looking to their local communities to hire the help they need to meet consumer demand this holiday season. Nearly three-quarters (73%) of local small business owners aware of Small Business Saturday said they make it a point to hire employees from their neighborhood.

Small Business Saturday, now in its fourth year, falls between Black Friday and Cyber Monday and serves as the traditional kick off to the holiday season for independent retailers and restaurateurs. The day was created in response to small business owners’ most pressing need, more customers, and has since grown into an annual celebration of the independent businesses that help boost our local economies.

“Small-business owners are always looking for new ways to creatively promote their products and services—especially in a tough economy,” said NFIB president and CEO Dan Danner. “Small Business Saturday is a reminder of how important the small-business sector is to our economy and why it’s so important to Shop Small all year around.”

Findings from the survey also uncover the lengths to which small businesses are ready to go to promote their activities on Small Business Saturday. Among those that plan to incorporate Small Business Saturday into their holiday promotions:

• 75% say the day would be more effective if communities participated together by hosting events;
• 39% are planning to collaborate with other small businesses in a community event to promote Small Business Saturday; and
• 33% rely on social media most to promote Small Business Saturday to their customers.

The Small Business Saturday Insights Survey was created to provide a window into holiday planning for small business owners. Other key survey findings relating to Small Business Saturday activities include:

• 67% will offer discounts on specific items or general discounts on the day;
• 36% will offer coupons for future offers or discounts;
• 32% are starting their holiday promotions earlier than last year; and
• 21% are planning to increase the number of employees working on Small Business Saturday.

Communities Come Together To Take Small Business Saturday to the Next Level
American Express has created a Neighborhood Champions program, working with business organizations like the U.S. Chamber of Commerce, the American Independent Business Alliance (AMIBA), the U.S. Black Chambers, Inc., the Latino Coalition and the American Chamber of Commerce Executives (ACCE) to organize Small Business Saturday events in communities throughout the country. To date over 1,000 Neighborhood Champions have signed up to rally businesses in their municipalities to partake in local activities leading up to and on the day.

“In 2012, small businesses took ownership of the day by offering great deals and amazing experiences for their customers,” said Susan Sobbott, president, American Express OPEN. “This year, with more than 1,000 ‘Neighborhood Champions’ rallying communities, the country will be blanketed with Small Business Saturday events that can undoubtedly help keep the registers ringing.”

Tools for Making the Day Their Own
For the past three years, small business owners have embraced the day and developed creative and effective ways to promote their businesses. American Express is again helping to amplify those efforts with free digital and in-store marketing tools to help small business owners expand their local footprint on Small Business Saturday and throughout the holiday season.

The Small Business Saturday Marketing Toolkit provides businesses with turnkey, personalized assets and materials to better promote their efforts. These tools are available at ShopSmall.com and include:

• Printable signage and decals to print and display in a business
• Logos and imagery for business websites, custom materials, and social media pages
• Suggested social media and email templates to get the word out to customers on the Web

American Express has also rallied organizations from across the country to lend a hand in providing resources to mobilize businesses and consumers for the day. Premier partners include:

FedEx Office
A longstanding supporter of Small Business Saturday, this year, FedEx Office is offering two copies of the free 11” x 17” printed poster that small business owners can create as part of their customized marketing campaign on ShopSmall.com. In addition, FedEx Office will offer a special discount to small businesses that take advantage of the free printing offer. FedEx will also promote Small Business Saturday to small businesses and consumers through their marketing channels. Offer terms apply and are available http://local.fedex.com/?promo=sbs2013.

Foursquare
New this year, Foursquare and American Express are offering small businesses $250,000 in free credits to use on the recently launched Foursquare Ads for Small Business platform. The credits will enable businesses to create local campaigns that can help drive new customers into their stores based on where they are, or what they are searching for. Additionally, Foursquare will highlight millions of small businesses in their app to help drive foot traffic to local merchants on Small Business Saturday. Offer terms apply and are available at http://business.foursquare.com/shopsmall.

Twitter
Twitter is offering one million dollars in free advertising to small business owners who have not advertised with Twitter previously, to help drive customer engagement and increase sales on Small Business Saturday and throughout the holiday season. Business owners can also get ready for the big day with an educational toolkit containing helpful tips on gaining more followers and launching exclusive promotions. Offer terms apply and are available at https://business.twitter.com/shop-malsl.

United States Postal Service (USPS)
As a Premier Partner of Small Business Saturday, USPS is providing shipping of Shop Small branded merchandise orders placed on ShopSmall.com as well as Neighborhood Champion Activation Kits. In a move to help drum up support and activity on Small Business Saturday, USPS will also distribute a consumer mailer and place signage at approximately 1,500 Post Offices to emphasize the importance of supporting their neighborhood business and to help motivate consumers to go out and Shop Small on the day.

Consumer Incentives to Shop Small
Again this year, American Express will give Card Members a special offer for shopping on Small Business Saturday. Card Members who register an eligible American Express® Card will get a one-time $10 statement credit when they use their registered Card to spend $10 or more on November 30, 2013, in a single, in-store transaction at a qualifying small business location that appears on the Small Business Saturday Map. Enrollment is limited and opens on November 24th at ShopSmall.com. Offer terms apply and are available at ShopSmall.com/offerterms.

About the Survey
The Small Business Saturday Insights survey was conducted among a nationally representative sample of 500 owners/managers of retail establishments with physical storefronts, kiosks, and restaurants/bars/pubs that are not part of a franchise. In order to qualify, all establishments had to have fewer than 100 employees. No quotas were established for this criterion, in order to allow for a natural representation of retailers. The average number of employees of all establishments in the survey was 6 (with the vast majority falling in the 0-5 range). The study was conducted anonymously via telephone by Redshift Research from October 4 to October 16, 2013.
About Small Business Saturday
November 30th marks the fourth annual Small Business Saturday, a day to support the local businesses that create jobs, boost the economy and preserve neighborhoods around the country. Small Business Saturday was created in 2010 in response to small business owners’ most pressing need: more customers.

About NFIB
NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 states. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists sends their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available online at www.NFIB.com/newsroom or NFIB.com/shopsmall.

WESTLAKE VILLAGE, Calif., Feb. 22, 2013, The new-vehicle retail selling rate in February remains above 12 million units—stronger than it was a year ago—as the auto industry recovery continues, according to a monthly sales forecast developed by J.D. Power and Associates’ Power Information Network® (PIN) and LMC Automotive.

Retail Light-Vehicle SalesFebruary new-vehicle retail sales are expected to come in at 931,100 vehicles, which represents a seasonally adjusted annualized rate (SAAR) of 12.1 million units, a decline from the robust 13.1 million SAAR in January, but stronger than the 11.7 million SAAR in February 2012. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.

“All signs of the industry’s health are positive right now,” said John Humphrey , senior vice president of the global automotive practice at J.D. Power and Associates. “Average transaction prices are up, incentives are stable, leasing is at a healthy level and newly redesigned models continue to make an impact on the marketplace.”

“Demand is increasing, but the automakers deserve credit for doing a much better job of keeping alignment of production and demand.” said Humphrey. “This has led to new-vehicle transaction prices that are averaging nearly $1,000 more in February than the same period in 2012 while incentives have remained relatively flat year over year.”

Total Light-Vehicle SalesTotal light-vehicle sales in February 2013 are projected to reach 1,176,200 units, a seven percent increase from February 2012 and the fourth consecutive month with the selling rate at or above 15.2 million units. Fleet share is expected to remain at the January level of 21 percent.

J.D. Power and LMC Automotive U.S. Sales and SAAR Comparisons

February 20131

January 2013

February 2012

New-Vehicle Retail Sales

931,100 units2

(9% higher than February 2012)

822,018 units

887,924 units

Total Vehicle Sales

1,176,200 units

(7% higher than February 2012)

1,041,982 units

1,147,761 units

Retail SAAR

12.1 million units

13.1 million units

11.7 million units

Total SAAR

15.2 million units

15.2 million units

14.4 million units

1Figures cited for February 2013 are forecasted based on the first 14 selling days of the month.2The percentage change is adjusted based on the number of selling days in the month (24 days in February 2013 vs. 25 days in February 2012).

Sales OutlookThe outlook for 2013 continues to improve, as the selling pace remains robust. In fact, LMC Automotive is increasing its 2013 U.S. forecast for total light-vehicle sales to 15.3 million units from 15.1 million units. The increase is split between fleet and retail light-vehicle sales, with the outlook for retail increasing to 12.5 million units from 12.4 million units.

“The current fundamentals that are driving strong vehicle sales—pent-up vehicle demand and a stable, recovering economy—are expected to get a boost by additional positive factors this year,” said Jeff Schuster , senior vice president of forecasting at LMC Automotive. “An expected recovery in the housing market, and 50 percent more new-model launches combined with an increase in lease maturities should keep light-vehicle sales climbing throughout the year.”

North American ProductionNorth American light-vehicle production in January 2013 finished at more than 1.3 million units, seven percent higher than in January 2012. Production in Mexico has increased by nearly 21 percent from January 2012 on higher General Motors, Ford, and Volkswagen volumes related to newer launches. U.S. vehicle production has grown by nine percent from January 2012, while Canadian production has declined by 13 percent during the same period.

Vehicle inventory levels in early February increase to a 74-day supply, compared with 59 days in January. A higher level is typical in February. However, at the current selling rate, inventory levels are expected to rebalance within the next month or two. Overall, there are nearly 3.1 million units currently available on dealer lots or in transit—an increase of approximately 600,000 units from February 2012.

LMC Automotive’s forecast for North American production remains at 15.9 million units for this year, a three percent increase from 2012.

“The current inventory situation and production plan for 2013 suggests that there is enough volume to support the expected increased level of demand, and there remains little risk for an overbuild environment,” said Schuster.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
The McGraw-Hill Companies (NYSE: MHP), a financial intelligence and education company, signed an agreement to sell its McGraw-Hill Education business to investment funds affiliated with Apollo Global Management, LLC in November 2012. Following the sale closing, expected in early 2013, the Company will be renamed McGraw Hill Financial (subject to shareholder approval) and will be a powerhouse in benchmarks, content and analytics for the global capital and commodity markets. The Company’s leading brands will include: Standard & Poor’s, S&P Capital IQ, S&P Dow Jones Indices, Platts, Crisil, J.D. Power and Associates, McGraw-Hill Construction and Aviation Week. The Company will have approximately 17,000 employees in more than 30 countries. Additional information is available at www.mcgraw-hill.com.

About LMC AutomotiveLMC Automotive, formerly J.D. Power Automotive Forecasting, is the premier supplier of automotive forecasts and intelligence to an extensive client base of automotive manufacturer, component supplier, logistics and distribution companies, as well as financial and government institutions around the world. LMC’s global forecasting services encompass automotive sales, production and powertrain expertise, as well as advisory capability. LMC Automotive has offices in the United States, the UK, Germany, China and Thailand and is part of the Oxford, UK-based LMC group, the global leader in economic and business consultancy for the agribusiness sector. For more information please visit www.lmc-auto.com.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates or LMC Automotive. www.jdpower.com/corporatewww.lmc-auto.com

The Managed Care Executive Group and HTMS survey demonstrates that health plans are optimistic and believe opportunities exist in post-reform era

NASHVILLE, Tenn., Feb. 15, 2013,The Managed Care Executive Group (MCEG) and HTMS, an Emdeon company, today jointly issued their fourth annual report examining critical issues, priorities and challenges for regional health plans in the post-reform era. The report, titled “Moving Forward: Payers Weigh in on Priorities for 2013 and Beyond,” is based on a survey of 75 health plans.

A highlight of this year’s findings was the health plans’ general optimism despite recent industry challenges. According to the survey, 82 percent of payers saw opportunities for their companies related to the Affordable Care Act (ACA).

“A common public perception is that health plans oppose reform,” said Ferris Taylor, strategy and planning director for MCEG and president of Armored Online. “Our findings show that sentiment is not the case. Only 13 percent of the health plans surveyed believe the ACA to be wholly negative for their business. Rather, organizations see opportunity for growth as the market changes.”

Full survey results will be shared during a webinar to be held at 3 pm ET on February 19, 2013. MCEG and HTMS executives will present results regarding how payers are handling operational issues, such as the Medical Loss Ratio (MLR), and challenges presented by the ACA, including participation in state health insurance exchanges (HIX). To register for the online event, visit http://www.htms.com/industrypulse.php.

Overwhelmingly, health plan respondents listed cost containment as their number one priority for 2013. Other continuing trends, such as participation in HIXs, accountable care and health information exchanges, appear to be stronger industry forces. In contrast to the 2012 report, administrative mandates were not a key focus for health plan respondents in the 2013 survey, likely due to the recent ICD-10 implementation deadline extension to October 1, 2014, and the transition to HIPAA 5010 that occurred last year.

Not surprisingly, growth also remained a key payer focus. “Health plans responding to the 2013 survey unanimously listed member retention and growth as their top operational objectives,” said Nancy Wise , vice president of strategic consulting for HTMS. “We believe that current industry drivers, including accountable care and the state HIXs, present opportunities for payers to expand their member base.”

The Managed Care Executive Group (MCEG) is a national organization that provides a forum for the open exchange of information, innovative ideas and experience among senior health plan leaders. MCEG was formed in 1988 to create a comfortable forum for the exchange of ideas, the development of valuable peer relationships and the opportunity to explore the innovation that will transform organizations and the industry. Its 24th Annual Forum begins March 10, 2013. Register at www.mceg.net.

About Emdeon

Emdeon is a leading provider of revenue and payment cycle management and clinical information exchange solutions, connecting payers, providers and patients in the U.S. healthcare system. Emdeon’s product and service offerings integrate and automate key business and administrative functions of its payer and provider customers throughout the patient encounter. Through the use of Emdeon’s comprehensive suite of products and services, which are designed to easily integrate with existing technology infrastructures, customers are able to improve efficiency, reduce costs, increase cash flow and more efficiently manage the complex revenue and payment cycle and clinical information exchange processes. For more information, visit www.emdeon.com.

LOS ANGELES, Feb. 7, 2013, Online shopping site PriceGrabber® just released results of its 2013 Valentine’s Day Shopping Survey, revealing a majority of consumers plan to shower their loved ones with gifts this Valentine’s Day holiday. Sixty-two percent of consumers plan to spend up to $100 on gifts this year, a decrease from 68 percent in 2012. However, 36 percent of consumers plan to spend more than $100 compared to 28 percent in 2012. Conducted from Jan. 22 to Jan. 31, 2013, the survey includes responses from 2,251 U.S. online shopping consumers.

Valentine’s Day Shopping Budgets On Par or Slightly Higher than 2012When consumers who plan to celebrate Valentine’s Day were asked about their spending habits compared with last year, 52 percent indicated they plan to spend the same amount as in 2012. Twenty-six percent will spend more, 17 percent will spend less, and 5 percent will not purchase a gift this year. According to PriceGrabber’s survey, the economic climate continues to be a relevant factor in shoppers’ mindsets, with 55 percent indicating the economy will have an effect on their Valentine’s Day purchasing decisions in 2013.

Consumers to Hit Stores and Shop Online for Gifts; Mobile Makes a PresenceShoppers plan to purchase Valentine’s Day gifts in a variety of ways this year, with online and mobile shopping continuing to increase in popularity. When consumers were asked to select all of the ways in which they plan to purchase Valentine’s Day gifts, 69 percent indicated they would buy gifts from a store, up from 54 percent in 2012. Fifty-six percent of consumers said they would purchase gifts online, a significant increase from 34 percent last year. This was followed by 5 percent of shoppers that indicated a purchase via electronic tablet device, compared to 1 percent in 2012; and 4 percent cited a purchase using a mobile phone, a slight increase from 2 percent last year.

“Consumers continue to shop and conduct product research in advance of making purchases in order to find the best pricing on products. We expect this trend to continue as shoppers hit the stores and go online to make their Valentine’s Day gift purchases this year,” said Rojeh Avanesian, vice president of marketing and analytics of PriceGrabber.com. “Our survey showed that 36 percent of consumers plan to compare prices using their mobile phones when Valentine’s Day gift shopping in brick-and-mortar stores, a jump from 29 percent in 2012, revealing that consumers are increasingly using their mobile devices to look for the best deals.”

Many shoppers will celebrate with an evening out and purchase greeting cardsWhen consumers were asked to select all of the things they plan to spend money on during their Valentine’s Day celebration, 39 percent indicated they would spend money on an evening out. This was followed by 35 percent of shoppers who noted they would purchase a greeting card for a loved one; 22 percent will buy flowers; and 20 percent will purchase candy. Fourteen percent of consumers selected jewelry, another 14 percent cited clothing and an additional 14 percent said they plan to buy themed gifts, such as stuffed animals or a heart-shaped present.

Most will shop one week in advance and plan to use cash and credit cards for purchasesWhen consumers who plan to celebrate Valentine’s Day were asked when they plan to purchase their gifts, 43 percent said they will do so one week in advance. Twenty-five percent of shoppers will purchase gifts two weeks prior to Valentine’s Day, 22 percent will shop within 48 hours of the gift giving day, and 10 percent will shop three weeks prior. Cash and credit cards are the most popular forms of payment among consumers planning to buy Valentine’s Day gifts this year. When survey respondents were asked to select all of the ways in which they plan to pay for a gift purchase, 55 percent said a credit card and another 55 percent cited cash. Eleven percent of consumers indicated they will use gift cards to make purchases.

For shrewd shopping on any budget, visit http://www.pricegrabber.com to browse products, compare prices, read merchant reviews, find local deals, online deals, and more. Download the mobile application for smart shopping on the go.

About PriceGrabber.com®PriceGrabber is a leading online shopping site with more than 23 million unique shoppers monthly. At PriceGrabber, savvy shoppers can instantly find and compare over 80 million unique products and services across 25 categories with more than 11,000 merchants. Compare products side by side to find the right retailers at the best prices within popular categories, such as Digital Cameras, TVs, Electronics, Computers, Clothing, Books, and more. PriceGrabber provides shoppers with the right product from the right merchant at the best price anytime, anywhere. Visit us at http://www.pricegrabber.com.

Many major retailers are advertising appliance sales right now. While most people wait until an appliance breaks to replace it, those who buy now or later this fall will get the best deal.

CHICAGO, Jan. 21, 2013, Shopping for a major appliance in January can mean substantial savings, according to Viewpoints (www.viewpoints.com), a leading consumer reviews and product ratings website. That’s because stores are trying to clear inventory from the past year.

January appliance sales

“January is a notoriously slow month for retailers across the board, and the need to push sales this month, combined with the quickly diminishing value of anything left over, prompts retailers to hold sales and also be willing to bargain to close a sale,” says Matt Ong , retail analyst at NerdWallet.

Appliance deals again in the fall

But waiting until September through November can result in even more savings. That’s when new models come out, so stores slash prices on older versions to clear space in the showroom.

Andrew Schrage , co-owner of the website, Money Crashers, notes exceptions. Air conditioners and refrigerators should be purchased in winter and spring, respectively. And there are other strategies. “For instance, if you shop earlier in the week when stores have fewer shoppers, you can receive better service. You certainly don’t want to invest a lot of money in a new appliance without making an informed decision.”

Expect to negotiate

Another factor in getting a great price is being willing to haggle, says Schrage. For the best deal, he recommends Sears, Home Depot, Lowe’s, h.h. gregg, BrandsMart and Best Buy. Schrage also suggests signing up for email updates from websites like FatWallet, which posts appliance deals from both online and brick-and-mortar stores.

Many consumers favor new models, but Schrage advises, “Unless there’s a new feature that is simply a must-have, consumers do not miss out on much by purchasing older models on sale.”

Read reviews

Shoppers also should read product reviews before purchase. “It’s only a bargain if you get what you pay for. Viewpoints provides authentic feedback from consumers on how you can expect the appliance to work in real-life situations,” says Viewpoints Founder and CEO Matt Moog.

Viewpoints (http://www.viewpoints.com) features 480,000+ consumer reviews covering 34,000+ products, including appliances, consumer electronics, mattresses, health and beauty items and insurance. Both reviews and ratings are available free of charge and without registration.

WASHINGTON, D.C., Jan. 10, 2013, Today the Consumer Financial Protection Bureau (CFPB) issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

“Addressing problems in the mortgage market is critical to helping our economy recover,” said CFPB Director Richard Cordray. “Today’s changes will better help consumers to understand the real costs of owning a home while protecting them from harmful practices that can trap them into high-cost mortgages.”

The Home Ownership and Equity Protection Act (HOEPA) was enacted in 1994 to address abuses in home-equity lending and refinances. Since then, HOEPA has deterred high-rate and high-fee lending in those markets. In recent years, high-cost mortgages have made up only about 0.2 percent of those types of loans.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) expanded HOEPA to cover home purchase loans and home equity lines of credit (“HELOCs”); revised HOEPA’s rate- and fee-thresholds for coverage; added a new coverage test based on a transaction’s prepayment penalties; and provided new limitations on risky loan features, as well as other new protections for high-cost mortgages. The CFPB has finalized rules to implement the Dodd-Frank Act’s amendments to HOEPA.

For loans that are high-cost mortgages, today’s final rule:

Bans potentially risky features: For mortgages that qualify as high-cost, the rule generally bans balloon payments (a large, lump sum payment usually due at the end of the loan) with some exceptions, such as for certain types of loans made by creditors serving rural or underserved areas, and bans penalties for paying the loan early.

Bans and limits certain fees and practices: The CFPB’s rule bans fees for modifying loans, caps late fees at four percent of the payment that is past due, generally prohibits closing costs from being rolled into the loan amount, and restricts the charging of fees when consumers ask for a payoff statement (a document that tells borrowers how much they need to pay off the loan). The rule also prohibits certain bad practices, such as encouraging a consumer to default on an existing loan to be refinanced by a high-cost mortgage.

In addition to strengthening the protections for high-cost mortgages, the Bureau today is implementing a requirement of the Dodd-Frank Act that lenders provide a list of homeownership counseling organizations to consumers shortly after they apply for a mortgage so consumers know where to get help when deciding what loan is best for them.

The Bureau is also implementing other changes made by the Dodd-Frank Act concerning escrow accounts. An escrow account is an account that a lender may set up to pay certain recurring property-related expenses on a consumer’s behalf, such as property taxes and homeowner’s insurance. Escrow accounts help to ensure that consumers have enough money to pay those bills when they come because the lender breaks the expenses down into monthly installments and adds them to the monthly mortgage payment. Through an escrow account, consumers can better see the true cost of owning a home with insurance and tax costs laid out with each mortgage payment and are better assured that those costs are paid in a timely manner.

Under current regulations, creditors are required to establish escrow accounts for certain higher-priced mortgage loans for a minimum of one year. Today’s final rule implements changes from the Dodd-Frank Act that generally extend the required duration of an escrow account on such mortgage loans from a minimum of one year to a minimum of five years. To preserve access to credit, the rule exempts loans made by certain creditors that operate predominantly in rural or underserved areas, as long as certain other criteria are met.